Tesla Fights Michigan Legislation on Direct-Selling, Servicing

Car Maker Has Gone Against Industry Model of Franchises

ANN ARBOR, Mich.—
Tesla Motors Inc.
TSLA -2.42%
is fighting legislation in Michigan that would prevent the electric-car maker from direct selling or servicing its vehicles in the state, the latest in a long line of battles the company has faced related to its distribution model.

The Silicon Valley-based auto maker has gone against industry standards, looking to sell direct to customers rather than use franchises. In most states, franchise laws protect dealers from manufacturers setting up company-owned retail networks.

Tesla has run into conflict with these rules in several states. Michigan, the spiritual home of America’s auto industry, is the latest to pursue legislation potentially slowing Tesla’s plan.

In an interview Thursday, Tesla’s regulatory chief,
James Chen,
said he met with leaders in Lansing to try and stop the progress of the legislative push. “We are playing a game of whack-a-mole in every state,” he said.

Both chambers of Michigan’s legislature last week passed bills that Tesla sees as unfair to their model. Mr. Chen said Tesla wouldn’t even be able to have a gallery featuring its cars, a restriction that goes beyond measures taken in other states.